Isn’t it funny that nobody boasts they are a buy to let landlord anymore? Roll the clock back to the early millennium, and you couldn’t go to the local golf club or shop at a Waitrose without someone dropping buy to let into the conversation as easily and as often as the weather.
Nowadays, Runcorn buy to let landlords have almost pariah status, as they place a brown paper bag over their head when they enter a letting agency, lest they are recognised as such. They can easily be recognised though, as the average age of a UK tenant in a property is 32 years old, while the age average of a UK landlord is between 40 and 61 years old.
Joking aside, if it wasn’t for buy to let landlords – Runcorn and the UK would be in a rather difficult position when it comes to housing our local people. Many people believe that if you take buy to let landlords out of the loop of the UK property network, then it would be the land of milk and honey for first-time buyers priced out of the market. Those Runcorn landlords provide Runcorn tenants with a mixture of homes to live in and using market forces, ensuring the right number of homes are available. In fact, the stats show that…
Runcorn buy to let landlords provide 2,441 Runcorn homes for 5,483 Runcorn tenants
Yet the retort from many tenant organisations would be that Runcorn landlords are wealthy middle-class people, voraciously exploiting the failing Runcorn property market for their profit and greed. Of course, the demographic of an average Runcorn landlord is they tend to come from more fortunate backgrounds, with 3 in 4 of Runcorn landlords aged between their late 40’s to late 60’s and 4 in 10 having a degree-level qualification.
It also wouldn’t surprise anyone to learn that those who invest in a buy to let Runcorn property are likely to be better off than those who have not yet been able to buy a home. That is the nature of the country we live in, and it’s a consequence of a competitive free-market economy (the alternative didn’t go too well in the Soviet bloc). Indeed, asserting that the buy to let landlords represent a transfer of wealth and money from tenants to landlords is like saying that the pub represents a transfer of wealth from drinkers to the pub landlord
Don’t get me wrong, the tax loopholes for landlords up until 3 or 4 years ago were a little ‘too’ generous; still, these were closed by the Tory’s themselves. However, should the government try to place even more burden on landlords like some are suggesting, forcing them to sell, I am certain some Runcorn first time buyers would find it cheaper to buy their first Runcorn home. This is because they wouldn’t be in competition with Runcorn landlords to buy the starter homes both types of buyers crave, meaning house prices would drop (simple economics would dictate that).
If the supply of Runcorn privately rented homes contracted at a greater rate (because landlords were selling up) than demand, this would make renting more expensive (again simple economics) for the vast majority of Runcorn tenants who were still renting. Irrespective of whether property values dropped, it might take years for a tenant to save for a deposit, while the rental properties the landlords want to sell, the tenants only need to be given two months’ notice to leave so the property can be put on the market.
One might ask why don’t the local authorities build more council houses?
Well, government funding has been tight because of the credit crunch deficit since 2009 and going forward because of the current situation with Covid-19, it will get even worse. In fact, of the 617,230 new homes built in the country over the last 4 years, only 8,270 or 1.33% were built by local authorities, meaning they built just over 1 in 100 of all new properties built in the last 4 years
This is important as the number of people in rented property has been growing over the last 20 years. In fact, when you look at all the tenants in council and private rented accommodation locally…
37.9% of Runcorn people live in a rented property
Interestingly, the demographic of a council house tenant is totally different from that of a tenant in a private rented home. The average age of a council house tenant is 52 years old (compared to 32 years for a private rented tenant), so it appears the older generation have the upper hand on council houses. So again, who exactly is going to house the people of Runcorn, especially the younger generation that can’t afford to buy?
Local authorities haven’t got the money, housing associations get their money from central government, so the only other source of housing is private landlords. The problem existed before private landlords filled the gap. No doubt many Runcorn landlords have certainly gained from the problem, especially between 2000 and 2007, yet at the same time, they have helped home millions of people.
Consequently, are Runcorn landlords greedy and selfish? For most law-abiding Runcorn landlords, who look after their tenants and their properties really well, nothing could be further from the truth. Yes, they have made some money – yet if you take into account property maintenance, mortgage finance, taxation, agent fees, surveys and inspections – it’s really not the gold mine many think it is.
Not until all the political parties stop using the housing issue as a political football will this issue be sorted. For example, it makes sense to allow mass building in the South East, again driving up supply and making property more affordable, yet that would wind up the Tory voting home county heartlands. It’s a shame because we do have the room to build more homes, in fact…
Only 1.2% of the country is built on with houses
The country needs a massive root and branch change to sort things out, yet I have grave misgivings that any politician has the stomach or the political resolve to do anything about it.
If Covid-19 does affect the confidence in the property market, that will be good news for Runcorn landlords, as long as the government doesn’t put its big ‘size 9’s into the rental market by taking even more money out of landlords pockets.
Historically, ambiguity in the property market typically results in an expansion of activity in the private rental market. Prospective home movers will rent in between selling their home and buying the next one while budding first-time buyers typically postpone their purchase and stay in the private rental market for marginally longer, which all increases demand for rental property.